Dear Amazon: No
Amazon recently announced they will now be paying tuition for all hourly U.S. employees. People are talking about what a wonderful thing this is. And I get it. After the year we’ve had, a big wonderful thing would be big and wonderful. But here I am in Kassandra Korner hoping I’m not the only one who sees this for the unmitigated bullshittery it is.
This new program covers college, GEDs and diplomas, and ESL classes. In the interest of simplicity I’ll just use numbers based on a college education.
If Google is to be believed, average cost of a 4 year degree in the U.S. is roughly $25K. So for 750,000 employees, that would be about $200M in tuition, assuming EVERY hourly employee availed themselves of this benefit. Which they won’t, but more about that in a minute. First, let’s talk about the money.
To you and me, $200M is a staggering sum we will never see in our lifetimes. To Amazon, $200M is only 1% of their net U.S. income for 2020 alone.
Net. For one year. In one country.
You know what 1% of the net income for an Amazon warehouse worker is? Based on a starting salary of $28,446, after taxes, that comes out to roughly…
So if Amazon were actually paying all those tuitions, it would be the equivalent of one of their warehouse crew paying $227. We really need to hang on to that perspective.
In 2018, pre-pandemic before the record-breaking year they had, Amazon received $129M in tax rebates. That figure will obviously increase based on their increased earnings. Might even completely cover $200M in tuition.
If they needed it covered. Which they don’t because that tuition won’t even be an actual expense. It will be a write-off.
Amazon owes over $1B in taxes. If you’re wondering why that number isn’t higher, based on the staggering sums of money they earn, part of the reason is paying huge chunks of compensation in stock, rather than cash. And here’s how that works for them:
Amazon grants restricted stock as part of an employee’s salary. To keep the numbers simple, we’ll say that stock, at the time it’s granted, has a value of $100. So Amazon has a $100 expense.
When that stock vests, and the employee can get actual cash for it, let’s say it’s worth $200. Neat, right? This employee was paid a hypothetical $100 that magically became $200 of real grocery money.
And magically became a $200 tax deduction for Amazon. Against an expense of only $100.
Now change those hundreds to billions, and you get a huge part of the reason Amazon hasn’t paid a whole lot of taxes.
Now add a deduction of $200M in benefits in the form of employee tuition, and you will see a future where Amazon is paying even less in taxes.
And again, that $200M is based on the assumption that all 750,000 U.S. Amazon employees avail themselves of this benefit. Which won’t happen.
The first group of people who won’t avail themselves of this benefit are the ones who have no interest in pursuing higher education. They may already have their degrees. Their goal may be to work their way up within Amazon. Whatever the reason, there will be a lot of people who have no interest in going back to school.
The second group of people who won’t are the ones who can’t.
The PR behind this announcement is clearly aimed at projecting an image of Amazon as a company that wants its warehouse workers to get an education so they can move on to bigger and better things. Which in and of itself says “working in an Amazon warehouse is terrible and no one wants to do it” but we’ll put a pin in that.
If you’re working in an Amazon warehouse, it’s very likely you would love nothing more than to move on to bigger and better things. Tragically, it’s equally likely you don’t have the time or energy to pursue any opportunity that will allow that, even if Amazon is footing the bill. You might be working a second job to keep a roof over your head. Or working the equivalent of a second job under the Amazon “mandatory overtime” policy. Point is there are only so many hours in a day and someone else covering your tuition doesn’t create the time needed to actually go to school if you ever want to sleep.
There will be people who genuinely try. There will be some who succeed. There will be others who will realize they can’t go to school while also working the number of hours necessary to keep them eligible for this benefit.
Amazon knows this.
And it is a classic cycle of abuse.
Because Amazon has a history of paying and treating its employees like shit, and Amazon has a history of grand gestures, large donations, things that make great commercials and flashy headlines. Things that very publicly make them look like the good guy.
This is Amazon saying you’re free to leave at any time, knowing full well you don’t have the resources to do so.
This is Amazon offering to help you pack, knowing you have nowhere to go.
This is Amazon handing you the keys to a car with an empty tank.
This is Amazon making it very obvious to anyone looking that it’s your choice to stay.
It’s the heartfelt apology. The jewelry and flowers. The promise to never do it again. The thing that, from the outside, makes your friends wonder why you aren’t happy when everything is clearly wonderful.
They don’t want to make the changes that could actually make them the good guy because that would require something other than hypothetical money. That would require effort, and admitting they were wrong to begin with.
But “Amazon Pays Living Wage & Back Taxes, Stops Treating Human Beings Like Sentient Bird Droppings” isn’t nearly as feel-good a headline as “Amazon Will Pay Tuition For All Employees”.
Just like “look at this beautiful diamond bracelet” doesn’t sound nearly as damning as “they promised not to break my other arm if I stay”.